Orix Corp. (8591), Japan’s most acquisitive financial firm, is considering bidding for Standard Chartered Plc (STAN)’s consumer credit unit in Hong Kong, according to two people with knowledge of the matter.
Orix may seek to team up with another investor to buy PrimeCredit Ltd., said one of the people, asking not to be identified because the information is private. London-based Standard Chartered wants to sell the unit for about $700 million, almost three times book value, and plans to compile a shortlist of potential bidders this month, another person said.
Standard Chartered Chief Executive Officer Peter Sands said last month that he may sell the unit, as the U.K. bank cuts costs and pares operations where it doesn’t have sufficient scale. Buying PrimeCredit would help Tokyo-based Orix, whose businesses include leasing, lending and real estate, expand abroad as a shrinking population limits the domestic growth potential of Japanese companies.
Atsushi Horii, a spokesman for Orix in Tokyo, declined to comment on whether the company is interested in buying PrimeCredit. Phone calls made to Standard Chartered’s public relations department in Hong Kong outside of regular business hours went unanswered.
Net income at PrimeCredit totaled about HK$520 million ($67 million) last year, one of the people said. That compares with profit of HK480.9 million in 2012, according to company statements.
Standard Chartered said in January that it’s merging its consumer and corporate-banking operations to trim costs and Sands in November said the lender will review its businesses to cut back or withdraw from less profitable markets. The bank’s full-year profit fell for the first time in a decade in 2013.
Orix has announced more than 20 investments in companies over the past two years, the most of any Japanese financial institution, according to data compiled by Bloomberg. It bought Dutch bank Rabobank Groep’s Robeco Groep NV asset-management unit for 1.9 billion euros ($2.6 billion) last year, its largest takeover.
The Japanese firm also owns a stake in Hong Kong-based United Asia Finance Ltd., a consumer-finance arm of Sun Hung Kai & Co.